More civil servants could find themselves out of work or forced to retire as the government indicates plans to continue restructuring the country’s wage bill over the next four financial years.
In the 2025 Budget Policy Statement submitted to the National Assembly on Thursday, February 13, Treasury said it plans to cut the national wage bill as a percentage of the country’s revenue to 17.4 per cent down from 24.6 per cent in the current financial year.
In the next financial year, which starts in July, the government plans to shrink the wage bill by 2.7 per cent to 21.8 per cent. Out of the Ksh4.263 trillion proposed for government spending from July this year to June next year, Ksh3.096 trillion will go to recurrent expenditures, including the wage bill.
The law requires that the government's expenditure on the compensation of employees, including benefits and allowances, not exceed 35 per cent of the equitable share of the revenue raised nationally plus other revenues generated by the government.
The cut coincides with the announcement that the government will shut down all public organisations that are underperforming. This follows a cabinet decision to dissolve and merge some parastatals, a decision that is estimated to affect at least 5,000 civil servants.
Earlier this month, Eliud Owalo, the Deputy Chief of Staff in charge of performance and delivery management in the Executive Office of the President, said the government will evaluate ministries, departments, and agencies (MDAs) performance and allocate funding as per their performance going forward.
“Moving forward, we are going to tie performance management and performance evaluation to reward management so that we allocate more money to organisations that add more value to the government’s development agenda,” Owalo said.
President William Ruto’s government has already introduced performance evaluations for all government ministries, state corporations, and tertiary institutions.
“The direction we are taking as a government is that we are not going to have organisations that are perpetually underperforming continue to be a drain on the exchequer. These organisations should be allowed to die their natural deaths.”
He further warned that the government will begin awarding best-performing parastatal Chief Executive Officers (CEOs) and employees with more funding, among other things, while those that are underperforming will be allowed to "die a natural death."
"Those institutions that are not performing will face sanctions, including individuals in those organisations. And organisations that are perpetually non-performers should be allowed to die their natural deaths," asserted Owalo.
Last year, the Government Spokesperson Isaac Mwaura said that approximately 43,976 public servants aged 55 and above are set to retire by 2029, with around 7,000 public servants expected to retire this financial year.
